India Slashes Windfall Tax On Domestically Produced Crude Oil

India has slashed windfall tax on domestically produced petroleum crude to Rs 4,100 ($50.14) per tonne from Rs 6,400 per tonne, effective Tuesday, as per a government notification.

Diesel, Petrol and Aviation Turbine Fuel (ATF) continue to remain exempted from Special Additional Excise Duty (SAED).

The move is positive for oil companies as they will now have to pay lower tax on the sale of crude oil in the market.

Tax rates on crude are revised by the government on a fortnightly basis, based on oil price fluctuations.

On 4 April, India removed windfall tax on crude oil from Rs 3,500 to zero per tonne. The levy on crude tax was increased to Rs 6,400 per tonne on 19 April.

In July last year, India imposed a windfall tax on crude oil producers and extended the levy on exports of gasoline, diesel and aviation fuel after private refiners wanted to make gains from healthy refining margins in the overseas market instead of selling it domestically.